All Forum Posts by: Karen Polis

@Steve Babiak - whoa - really? 

I wonder what's going on there...

@Jay Hinrichs Good luck on your presentation. I'm near Philly.

@Jeff S. I knew the rule about rehabbing through an IRA before getting into this. I did not do or plan to do any of my own work on the house, other than to contact contractors to do that work. I kept sending people to talk to the borrower (Calvin 'Skip' Lucas - no sense keeping his ID secret anymore as others should know to stay far away from him) and he gave every excuse in the book why he wouldn't use them. He actually DID do some work on the house himself, so he is in violation with that. (At least there is something he can be legally called out on here.)

I agree with you that I did not learn enough before getting involved with this, but there's no sense letting it stop me from ever trying again. I have learned A LOT - the hard way - and hope to see much better results in the future.

yup - agreed. And I learned a whole lot from this, so at the least, I won't make these mistakes again.

That's some creative thinking I had not considered. We are all of us letting it go. I suppose at this point, even using this strategy I don't want to hold onto it. I would still need to hire a lawyer to draw up deed transfer papers and then get the borrower to transfer the deed, which I'm guessing he won't do without compensation (even though he basically stole from all of us). The sale is this Thursday. I have no experience with any of this, so trying to do anything last minute on my own is very stressful to even think about. I think I'm better off just moving forward with fresh deals that aren't soured by deceit.

We have decided to let this one go to tax sale. The numbers and situation just keep looking worse. Not worth the money and effort it would take to salvage it. Hopefully, this is my "beginner's bad luck" deal and from here on out will be smoother sailing...

Thanks for everyone's input.

Yes, my name is on the deed. I have never heard of land trusts being scams. In my area, I've always heard people recommending to set them up as land trusts but I don't remember why. Something about the laws here?

The borrower has agreed to deed the house over to us. Whether he comes through on that is yet to be seen. He is not fit to complete the deal himself and I believe he wants to get it off his hands any way he can. We already have a lawyer drawing papers up on the transfer.

Yes, I believe you are correct, that the rehab will be more around 50-60k. 

I got into this deal initially with the idea that I would be project manager and learn what it takes to flip a house. What a way to learn!

@Steve Babiak 

Thank you so much for your analysis here. This is very helpful and appreciated. If your estimation of $140 or anywhere over $100 for that matter is accurate, then I believe it is worth it to pay the taxes and complete the deal. We are now trying to decide if we put minimum work into the house, can we recoup at least some of our money. We will not even break even, but would like to get something back, if possible.

Upon going to see the house, it doesn't look good. It's in worse condition that it was 2 years ago. The porch and porch roof will need to be replaced. It stinks of mold and cat pee inside (we weren't able to go inside but looked through the open window). A tree stump in the backyard needs to be removed.

We believe the borrower is not in his right mind. He had a stroke during this time period and I think it made him loopy. He's done things like buy borders and lawn furniture for the house rather than rehab it. He appears to be living there part-time. We saw him and he looks like he is on death's doorstep. I don't believe he meant to scam us. I believe he is sick in both mind and body.

Hopefully, we can salvage at least some of our investment. In the end, it is just money and seeing him in his condition made me realize just how lucky and healthy I am.

@Steve Babiak It's through my Self-directed IRA, that's why my name is not showing. I may contact you off the thread, though, since there are others involved here, I don't want to get too specific on a forum

@Ian Walsh Thanks -I'll keep you in mind, however, at this point in time, I believe we are all wanting to wrap up the deal, rather than hand it over.

@Greg H. What kind of magic indeed! From what I understand, he has been flipping houses legitimately for 35 years. Though I imagine this is not the first time things went bad. He doesn't seem to have a prior record of shady dealings, but who knows...